Opinion: How Will Wall Street Greet the Pope?

Hazel Henderson, author of 'Mapping the Global Transition to the Solar Age' and other books, is President of Ethical Markets Media (USA and Brazil), Certified B Corporation

ST. AUGUSTINE, Florida, Aug 27 2015 (IPS) - Millions in the New York City area are excited about Pope Francis’ visit on Sep. 25 to address the U.N. General Assembly as worldwide consensus grows on the need to shift global investments from fossil fuels to clean, efficient, renewable energy in the UN’s Sustainable Development Goals (SDGs) scheduled to replace the expiring Millennium Development Goals (MDGs).

Private investments worldwide in the clean energy transition now total 6.22 trillion dollars while successful U.S. students’ divestment networks have forced over 30 college endowments to divest. Over 200 institutions have divested worldwide, including the U.S. cities of Minneapolis and Seattle, Oxford in the United Kingdom and Dunedin in New Zealand.

Hazel Henderson

The Episcopal Church and the Church of England, in a faith-based consortium, are calling on Pope Francis to urge divestment for all religious and civic groups. Islamic Climate Change Symposium leaders cited the Quran earlier this month in calling 1.6 billion Muslims to act in phasing out fossil fuels by 2050.

Backlash from traditional Wall Streeters has joined some U.S. Catholic organisations with millions still invested in fossil energy, fracking and oil sands. The U.S. Conference of Catholic Bishops (USCCB) has guidelines against investing in abortion, contraception, pornography, tobacco and war but is silent on energy stocks.

Reuters reports that Catholic dioceses in Boston, Baltimore, Toledo and much of Minnesota in the United States have millions of dollars in oil and gas stocks, making up between 5-10 percent of their holdings. It has been reported that Chicago’s Archbishop Blasé Cupich, appointed by Pope Francis, will re-examine over 100 million dollars in fossil fuel investments.

Wall Street is also re-examining its positions on fossil fuels. A survey of asset managers in Institutional Investor, July 2015, found that 77 percent expected the carbon-divestiture movement to continue and gain momentum. Yet, Exxon Mobil CEO Rex Tillerson has claimed that the models on climate change “aren’t that good” and has no plans to invest in renewable energy.

Recently, many large companies have been calling for and budgeting for carbon pricing – favoured by most economists. Britain’s BG Group, BP, Italy’s ENI, Shell, Norway’s Statoil and France’s Total sent an open letter to world governments and the United Nations in June asking them to accelerate carbon pricing schemes.

The U.S. Conference of Catholic Bishops (USCCB) has guidelines against investing in abortion, contraception, pornography, tobacco and war but is silent on energy stocks

The ethical investing movement now accounts for one-sixth of all holdings on Wall Street and the U.N. Principles of Responsible Investing counts signatory institutions with 59 trillion dollars in assets under management.

Hybrid approaches include venture philanthropy and “impact” investing, while a recent CFA Institute survey found almost three quarters of investment professionals use environmental, social and governance information in their investment decisions.

Against this backdrop, Timothy Smith, pioneer founder of the Interfaith Council on Corporate Responsibility (ICCR) and now Senior Vice-President of Walden Asset Management, says that the “visit of the Pope in the wake of his prophetic Encyclical on climate is a clarion call – to ramp up our efforts to combat climate change with concrete actions,” adding that “it’s not the Pope’s job to present a specific game plan for Americans. That is our job.”

Through ICCR, religious investors have worked for two decades on these issues. Firms like Walden, Ceres and others have joined up to combat climate change, promoting efficiency and renewable resources. All this new activity within the climate debate provides the greatest challenge yet to business-as-usual capitalism.

Many financiers in the global casino still see themselves as “masters of the universe” because they control capital flows, most investments, pension funds, influence monetary policies, capture politicians and regulators, while funding friendly academics and think tanks.

The recent jitters of stock markets have again revealed their fragility and the increasing turbulence and volatility caused by computerized algorithms accounting for over half of all activity. High-frequency trading (HFT), “flash crashes”, are continuing with little regulation. Foundations are crumbling from these many new challenges as small investors flee.

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Crowdfunding, peer-to-peer lending, local and cryptocurrencies, credit unions and cooperative enterprises are flowering along with hybrid start-ups in the “shareconomy” – AirBnB, Uber, Lyft, Task Rabbit and the growth of farmers markets, swap sites for tools, clothes and second-hand exchanges.

Many reformers of capitalism try to change its culture, of short term gain and speculative trading. The U.N. Inquiry into the Design of a Sustainable Financial System will release its report to the General Assembly on Sep. 25, with global research on current practices and potential reforms.

A promising new effort to mobilise U.S. public opinion is JUSTCapital, founded by luminaries Deepak Chopra, Arianna Huffington and hedge fund philanthropist Paul Tudor Jones. CEO Martin Whittaker says: “We are addressing some of the core questions affecting capitalism and corporations in the 21st century. We are applying policy, research and surveys to define ‘just business behaviour’ in the eye of the public, using this definition to evaluate and rank the performance of the largest publicly traded American companies.”

While such caring financiers are quietly exploring reforms, the biggest threat is the fragility of global market structures from automation, algorithms, HFT and artificial intelligence which financiers still believe they can control.

Yet these same computers can now run markets more efficiently than humans. Matching and trading buy and sell orders in transparent computerised black boxes makes human traders redundant, as well as reducing insider trading, speculating, front-running, naked short-selling, fixing interest rates and today’s widespread greed and corruption.

Capitalism’s greatest challenge is its reliance on rollercoaster national money systems and currencies. Central bankers and governments’ tools fail along with economic theories as social movements are now aware of money-printing and the politics of money creation and credit-allocation, revealed in all its favouritism and inequalities.